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November 10, 2010
No “anti-arbitrating” presumption to resolving grievances alleging a violation of a collective bargaining agreement
Watertown CSD v Watertown Education Association
Indian River CSD v Indian River Education Association
Court of Appeals, Nos. 50 & 51, joint decision issued 93 NY2d 132
In numerous decisions, New York State courts have frowned on the use of arbitration to settle disputes between public employers and unions unless the collective bargaining agreement specifically states that the subject matter involved is subject to the contract grievance procedure set out in the agreement. In the combined decision issued for the Watertown and Indian River cases, the Court of Appeals -- New York State’s highest court -- articulated a much more liberal view regarding the use of arbitration to resolve public sector collective bargaining issues. It ruled that there is no anti-arbitration presumption in the Taylor Law or as a matter of public policy, and signaled lower courts to be less strict when deciding if arbitration is required by contracts.
Both cases involved claims regarding the arbitrability of an increase in employees’ health insurance co-payments. Although the relevant collective bargaining agreements were silent regarding whether resolving co-payments complaints was subject to contract grievance procedures, the Court of Appeals found the issue was arbitrable.
Key was the fact that the Taylor Law contracts involved each contained a broad arbitration clause that provided that “any alleged violation of this Agreement, or any dispute with respect to its meaning or application” was arbitrable.
Given the broad arbitration clause in the Watertown and Indian River agreements, and the presence of some language dealing with health insurance benefits, the Court of Appeals ruled that “the reduction of benefits by increasing the employees’ co-payments was an arbitrable issue.”
The dispute arose after Watertown and Indian River, together with a number of other school districts, formed a Municipal Cooperation Agreement to provide health insurance benefits for employees of participating districts. When the Plan raised the employees’ co-payment cap in response to “financial conditions,” the Watertown and Indian River Teacher Associations each filed a grievance alleging that the change in employee contributions constituted an impermissible, unilateral reduction in employee benefits and a violation of their respective collective bargaining agreements.
The grievances were denied. When the Associations sought arbitration, both districts asked for, and obtained, stays on the grounds that the parties had not agreed to arbitrate the dispute at issue.
But the Court of Appeals ruled that it is not necessary for a given issue to be specifically enumerated in the contract grievance portion of a collective bargaining agreement for it to be arbitrable. It ordered the parties in both cases to “proceed to arbitration.”
The court noted that there were two basic arbitration concepts contained in the Taylor Law:
1. Compulsory arbitration: Also referred to as “interest arbitration,” such arbitration is authorized by Section 209 of the Civil Service Law. It is triggered by an impasse in the course of negotiating terms and conditions of employment for police personnel. The decision of the arbitration panel “is final and binding” on the parties. Section 209.4 is a legislatively mandated alternative to striking by police officers or firefighters. This provision will expire June 30, 1999 unless extended by the Legislature.
2. Permissive arbitration refers to the ability of the parties to a collective bargaining agreement to voluntarily agree to arbitrate any subject matter as long as it does not concern a matter of public policy. Court held matters of public policy that are off-limits to arbitration include: (1) tenure decisions, (2) decisions to terminate an employee for violation of the federal Hatch Act, (3) seniority disputes involving academic standards, and (4) accessibility to personnel files. [See the Court of Appeal’s decision in Matter of United Liverpool Faculty Association, 42 NY2d 509]
In the Watertown and Indian River cases, the Court of Appeals clarified its stance on arbitrability of disputes. It said that Liverpool did not expressly create a “presumption” against public sector arbitration. The high court said: “[T]o the extent ... that one may be implied or fairly so characterized, an anti-arbitrational presumption is no longer justified either in law, or in the public sector labor environment.”
To determine if a given subject is arbitrable under permissive arbitration, the court said it would stay with a two-step analysis set out in Liverpool because “it has been workable for over two decades.” The Liverpool tests are:
1. Is the arbitration concerning an area subject to the Taylor Law (i.e., not a matter involving public policy)?
and, if so,
2. Did the parties agree, by the terms of their particular arbitration clause, to refer their differences in this specific area to arbitration?
In regard to the second test, the Court of Appeals sent a message to judges throughout the state that they should not be too strict in evaluating whether the parties had agreed to arbitrate specific types of disputes. “A court confronted with a contest of this kind should merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the collective bargaining agreement,” the Court of Appeals said.
It set out the following guidelines for lower courts to follow:
1. If a court finds that there is no reasonable relationship between the subject matter of the dispute and the general subject matter of the agreement, the issue, as a matter of law, is not arbitrable.
2. If a reasonable relationship is present, the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the substantive provisions of the collective bargaining agreement, and whether the subject matter of the dispute fits within them.
The court implied that if an employer seeks a stay of a demand for arbitration, the judicial standard would be “strict scrutiny.” In other words, the employer would have to show compelling governmental interest in avoiding the arbitration. The decision also states that “it is also clear that the merits of the grievance are not the courts’ concern.”
The court noted that “the decisional law reflects the reality of greatly increased public sector arbitration, and its acceptance, compatible with the government’s public policy concerns.” As an illustration, the court listed the following types of disputes as having been ruled subject to resolution by an arbitrator.
1. Union’s use of public office space.
2. Rehiring on basis of seniority.
3. Employee evaluations.
4. Grievance filed by a nonteaching employee under teachers’ collective bargaining agreement.
5. Violation of disciplinary provisions claimed by a probationer.
6. Denial of a sabbatical leave.
7. Failure to submit a change in educational policy to advisory professional council.
8. Compensating a peace officer for an off-duty arrest.
9. Violation of a “no-reprisal clause in agreement.”
Public Personnel Law E-books
The Discipline Book - A concise guide to disciplinary actions involving public employees in New York State set out in a 700 page e-book. For more information click on http://booklocker.com/books/5215.html
A Reasonable Disciplinary Penalty Under the Circumstances - A 442-page e-book focusing on determining an appropriate disciplinary penalty to be imposed on an employee in the public service in instances where the employee has been found guilty of misconduct or incompetence. Now available in two formats - as a large, paperback print edition and as an e-book. For more information click on
The Layoff, Preferred List and Reinstatement Manual - A 645 page e-book reviewing the relevant laws, rules and regulations, and selected court and administrative decisions. For more information click on http://booklocker.com/books/5216.html
General Municipal Law §§207-a and 207-c - Disability Leave for fire, police and other public sector personnel - A 1098 page e-book focusing on administering General Municipal Law Sections 207-a/207-c and providing benefits thereunder. For more information click on
SELECTED REFERENCES and BLOGS
- A Handbook addressing disciplining public employees
- A Handbook focusing on imposing reasonable disciplinary penalties
- A Handbook focusing on layoff and reinstatement
- A Handbook on Disability Benefits for public employees
- A sample personnel handbook
- Blogging Civil Rights Law
- Blogging Constitutional Law
- Blogging Disability Law
- Blogging Education Law
- Blogging Human Rights Law
- Blogging Legal Information
- Blogging Military Law
- Blogging public libraries
- Challenging Adverse Personnel Decisions
- COVID-19 - New York State maps and data
- Delaware Employment Law Blog
- Gotham schools newsroom - A NYC school news blog
- New York City ERS blog - by John Murphy
- NY Municipalities - NYMUNIBLOG
- St. Lawrence County Civil Service Web Site
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